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  • Writer's pictureBRANDi

The Future of Retail is Phygital


A survey from Coveo, a trading and e-commerce solution firm, found that nearly one-third of customers would abandon a brand after just one negative experience. This shows that connecting with customers has never been more critical to create new experiences that work for them. E-commerce is forecast to account for 24% of global retail sales by 2026; however, an appetite for in-store experiences still lives on for the remaining 76% of customers. This signals that creating “Phygital” environments, or bridging the gap between brands’ physical and digital presence, can go a long way to elevate customer experiences and boost brand loyalty.


WHAT IS PHYGITAL?

Changes in customer preference from physical to "Phygital" have encouraged retailers to find meaningful ways to merge brick & mortar experiences with online offerings. According to the Journal of Retailing and Consumer Services, Phygital is a holistic and exhaustive form of omnichannel management in today's world. Compared to an omnichannel approach, which focuses on e-commerce and purchase, the Phygital realm encompasses these, in addition to branding, marketing, promotion, advertising, innovation, and pricing tools, to provide customers with not only monetary benefits but also symbolic, social, and identity-based advantages. The free flow of in-store and online data enables organizations to get creative with their services and add value, which is especially important to keep customers. Thus, creating effective Phygital strategies will be essential to win and retain customers in this new retail landscape.


CASE STUDIES

With integrated stock management data, retailers can offer flexible fulfillment, allowing customers to click and collect, buy online pick-up in-store, or buy an in-store delivery home. Marks & Spencer, a British retailer, created a Phygital environment to reach and inspire new customers with its blend of physical and virtual worlds, launching its customer interaction program using virtual influencers. Another example is a British fitness apparel brand, Gymshark, which opened its first physical store after its online success, offering innovative, on-the-ground experience, including workout areas and an in-house juice bar. These two examples merge online and onsite functions to provide a seamless new experience for their customers. In an increasingly competitive market, retailers must create a consistent customer journey to stand out. This Phygital strategy will succeed only when companies stick to what will be of real benefit to customers, integrate data from all aspects of the business, and use this to improve in-store and online customer experiences.



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